_Stocks_ is a general name given to the capital of incorporated
companies. They are divided into equal parts, usually of $100 each,
called _Shares_, the owners of which are called _Stockholders_. A
_Dividend_ is a part of the net income of the company, divided among the
stockholders.
A _certificate of stock_ is a written paper signed by the proper
officers of the corporation, naming the number of shares to which the
person named therein is entitled, and the original value of the same.
_Preferred stock_ is stock which is given a preference over the common
stock. Ordinarily, a dividend is paid on the preferred stock before any
is paid on the common shares.
_Common stock_ is the ordinary stock of a corporation, which has no
preference, in the payment of dividends, over any other.
The _par value_ of a share of stock is the value named in the
certificate of stock.
When a corporation is prosperous, its shares of stock often sell for
more than the value named in the certificate of stock. They are then
said to be _above par_, or _at a premium_. In times of business
depression, often these shares of stock sell below their face value.
They are then said to be _below par_, or _at a discount_.
The _market value_ of a share of stock is the value for which it sells
in the open market.
A _stock broker_ is one who makes a business of buying and selling
stocks and bonds. He charges a commission for this which is called
_brokerage_.
A _surplus_ is a part of the earnings of a corporation.
The _gross earnings_ of a corporation are its total receipts from all
sources.
The _net earnings_ are the profits remaining when all expenses, losses,
interest and debts due are paid.
An _assessment_ is a sum levied proportionate to stock held by
stockholders, to help out the business when it is not prospering, or
when more money is needed to carry it on. It is levied as so many
dollars on each share at its par value.
The _directors_ are those shareholders elected by all to manage the
affairs of the corporation.
A _bond_ is, in form, a carefully drawn interest-bearing promissory
note. Ordinarily, it runs for a period of years with interest often
payable semi-annually. It is more formal than the ordinary promissory
note. Bonds are usually issued by national, state, county, or local
governments, or by corporations, when they wish to raise large sums of
money for immediate use.